More craft breweries now than in 1890

[aviking427]

Pretty cool graph. Obviously this explosion can't continue, there are only so many taps!

http://www.huffingtonpost.com/2012/08/06/us-craft-beer-breweries-growing_n_1748520.html

They said the same thing about the wine industry and its still growing. If they could fix the distribution network/3 tier system, we would see a lot more market share going to real beer vs the questionably flavored water BMC makes. I say that with a forked tongue though, slower growth for the craft industry is probably the best thing. It ensures quality over quantity which is how craft beer got where it is today.

[nateo]

Craft beer requires a specific economic ecology to thrive. In CO a combination of self-distribution laws and huge numbers of independent liquor stores allowed craft beer to blow up. A large part of that was because most grocery stores aren't allowed to sell any beer over 3.2% beer, and no liquor or wine. In Missouri, any kind of retail establishment can sell any beer or liquor of any strength. There are hardly any independent liquor stores, and there are only a handful of breweries here.

So it's not just the 3 tier system that's keeping craft beer down. This is a good example of the difference between "pro-business" and "pro-market" regulation. What's good for a specific business (3-tier for BMC and limited liquor sales for breweries in CO) may be bad for consumers (fewer choices, less variety in MO, fewer places to buy liquor in CO). Craft beer has thrived in CO because of strict liquor retail regulations, and craft beer is anemic in MO because of overly lax retail regulations. 

[euge]

Nateo when you state "retail establishments" do you mean restaurants and bars?

What's good for a specific business (3-tier for BMC and limited liquor sales for breweries in CO) may be bad for consumers (fewer choices, less variety in MO, fewer places to buy liquor in CO). Craft beer has thrived in CO because of strict liquor retail regulations, and craft beer is anemic in MO because of overly lax retail regulations. 

I'm sure the Anheuser-Busch Co. were allowed to pen in the legislation themselves and passed without protest...

[aviking427]

I agree with you, but I do think fixing the 3 tier system would probably have the largest effect on Craft Beer as a whole. Its pretty corrupt frankly. (state law will always be a separate battle) the BMC's, as much as they aren't supposed to, give incentives for tap and shelf space simply because they can. They have the capital to throw around to distributors, just look at AB's exclusive distribution network. Then the distributors take those incentives and bring it to the restaurants and stores to sell more so they get more incentives. "Hey, here are some awesome box tickets to the Yankee's vs Redsox, how about that extra tap space?" "We accidentally gave you 2 extra kegs, no worries and oh, here is an extra jockey box we had laying around, bet you could use that for the patio bar. Thanks for being such a good customer, oh, btw, Assenheimerbusch is coming out with a new lower calorie beer thats lighter than air, how about you help us push it and do a few promo nights." In the 14 years of bar tending I did, there wasn't a place I worked where that didn't happen on a regular basis.  This is a federal issue which effects each state. State law, well, thats just another part of the game and we are starting to see state legislation loosen up a bit.

[bluesman]

This is encouraging news.  I'm glad to see the current trend.  We should enjoy it while it lasts.  Keith, I hope you can reap the rewards of this upward swing.

As we all know, "what goes up must eventually come down"...I just hope this trend continues for some time.

[nateo]

Euge - I meant anywhere in MO with a retail license can very easily get a license to sell liquor as well. Usually it's just convenience stores that bother with them, but there's no reason I couldn't get a liquor license for my tackle store. In fact I've thought about doing that, and tackle stores in other areas do just that. What that means is that every convenience and grocery store in the state sells beer, wine, and liquor of all strengths.

In CO independent liquor stores collectively have a monopoly on liquor and wine, and all beer over 3.2%ABW. Every few years someone tries to repeal that law. I've seen estimates that if grocery and convenience stores can sell full-strength beer and wine it would put about half the independent stores out of business basically immediately, and probably put another 1/4 out of business over the next few years.

The problem with Kroger or Target selling booze is that while it'd be really convenient and cheaper for customers, it'd be really bad news for microbreweries. If you're a brewery, and sell to Kroger in CO, you have to sell to all the Krogers in the district. It'd force moderately large microbreweries to use all their production capacity on their best selling beer, and the lack of independent liquor stores would put a lot of the smaller breweries out of business.

So you could look at CO's laws as either protecting an effective monopoly by small-businesses, or protecting independent stores from competition with national chains. I'm pro-small-business and pro-craft beer, so it never really bothered me. But I can see how a lot of people would have problems with that kind of anti-free-market protectionism. If you like BMC, you'd probably feel the same way about the anti-free-market protectionism that they're afforded.

But yeah, there's a lot of cronyism in politics in both states. Gov./former mayor of Denver Hickenlooper was an owner of Wynkoop Brewing Co, one of the oldest microbreweries in CO. In MO, and St. Louis specifically, A-B is a really big deal. I voted for Hickenlooper, so I guess cronyism doesn't bother me when it's cronyism to support things I like.

[euge]

Wow. If I read that correctly you basically have to have the production to supply all the various retailers or not be able to operate at all. AB as the #1 producer feels no fear from that aspect...

[nateo]

Wow. If I read that correctly you basically have to have the production to supply all the various retailers or not be able to operate at all. AB as the #1 producer feels no fear from that aspect...

Yeah, that's about it. In CO you can own a microbrewery and sell a single six pack to Ted's Liquor Store. In MO you have to sell to a third-party distributor (depending on how you set up your licenses, that either can or cannot be owned by yourself), and that distributor sells to Brown Derby (liquor chain) or Walmart, which wants enough product to stock all of their stores in the region.

There are a few independent liquor stores around, but I don't shop there because they only stock BMC. Walmart has one of the best selections around here, which is really sad.

[passlaku]

The population of the US was about 63 million in 1890. Since there were 2,011 breweries in 1890, that meant there was 1 brewery for every 31,000 people. With todays population being 312 million, each brewery is supporting about 146,000 people. I suppose most of that is supplied by the big 3 though. We still have room to grow even if we don't party like its 1899. 

Thanks for providing some context to these numbers.

[repo]

The population of the US was about 63 million in 1890. Since there were 2,011 breweries in 1890, that meant there was 1 brewery for every 31,000 people. With todays population being 312 million, each brewery is supporting about 146,000 people. I suppose most of that is supplied by the big 3 though. We still have room to grow even if we don't party like its 1899. 

Thanks for providing some context to these numbers.

Ah but the real question is how many beers per person were produced. I'd bet AB alone produces more per person than the entire country did back then. Two completely different worlds we're talking about.

[nateo]

Ah but the real question is how many beers per person were produced. I'd bet AB alone produces more per person than the entire country did back then. Two completely different worlds we're talking about.

Not quite, but you're close. Total US production in 1890 was 27.9m bbl, 13.6 gallons per capita. A-B production alone in 2000 was 99.2m bbl, which was 10.85 gallons per capita.

http://eh.net/encyclopedia/article/stack.brewing.industry.history.us

[FirstStateBrewer]

This is encouraging news.  I'm glad to see the current trend.  We should enjoy it while it lasts.  Keith, I hope you can reap the rewards of this upward swing.

As we all know, "what goes up must eventually come down"...I just hope this trend continues for some time.

So if you're like me, you're hoping the trend continues long enough for you to get in on the action!   

[morticaixavier]

What I find interesting about that graph is that prohibition did nothing to the level of drinking in america. the gap represented by prohibition could be replaced with a simple continuation of the line and nothing would change. the numbers were trending down already.

[Joe Sr.]

What I find interesting about that graph is that prohibition did nothing to the level of drinking in america. the gap represented by prohibition could be replaced with a simple continuation of the line and nothing would change. the numbers were trending down already.

Except that the graph is number of breweries, not alcohol consumed.

What prohibition likely did was hasten the consolidation of the industry into fewer larger breweries, though of course that's not supported by the graph, as you point out. Pure speculation on my part.

[morticaixavier]

What I find interesting about that graph is that prohibition did nothing to the level of drinking in america. the gap represented by prohibition could be replaced with a simple continuation of the line and nothing would change. the numbers were trending down already.

Except that the graph is number of breweries, not alcohol consumed.

What prohibition likely did was hasten the consolidation of the industry into fewer larger breweries, though of course that's not supported by the graph, as you point out. Pure speculation on my part.

True. Your statement is more acurate, so prohibition, contrary to what might seem logical did NOT hasten the consolidation of breweries. At least according to that graph.